China on Microsoft's Case

This is old news to most people since the Chinese government has investigated Microsoft several times over the years, but this one may be different.  An article in today's Wall Street Journal [China Asks Microsoft About Data "Problems" byline to Beijing] says China has asked Microsoft to clarify some data gathered as part of an investigation by the State Administration for Industry and Commerce (SAIC).  The investigation, now over a year old, apparently related to how Microsoft distributes its browser and media player in China.

When I testified at the U.S. China Economic and Security Review Commission last June, the concern was over impediments that China put in the way of U.S. businesses.  This was at a time when President Xi was speaking to business groups in Seattle telling them how much better relations should be and how much they could benefit from alliances with Chinese industries.  At the time, he was about to test out a new counter terrorism policy that requires industries to hand over source code and encryption keys for any mechanisms used to secure their data.  Why anyone would do such a thing was beyond us.  IBM was the first to publicly comply.  Using excuses to harass U.S. industries while stealing their technology, seemed to not bother the Chinese that much.  Why we don't do more to push back on this kind of thing is hard to imagine.

Microsoft recognized years ago that it was being ripped off by the Chinese.  They fought them and suffered for it, at least until they gave up and went along.  Water torture was not a term invented by the CIA.  The Chinese use the techniques on every business in their country.  Microsoft stayed because they could make more on the 10% of software sold verses the 90% counterfeited, and maybe today can make the latter number lower.  They think it is worth it.

The Chinese fined Qualcomm a billion dollars under similar circumstances.  While they get all the benefits of lower prices, we don't.  I don't get to pay any less for Microsoft products because China accuses it of doing things that raise prices there.  They fork over a similar amount of money and allow that software to be duplicated without any benefit to me.  I listen to Donald Trump with a great deal of skepticism, but I'm wondering if some brashness would not be beneficial here.  None of the businesses that operate in China should be allowed to do so unless they can lower their prices in the USA.